In multiple sclerosis, the interplay of neurodegeneration, demyelination and inflammation leads to changes in neurophysiological functioning. This study aims to characterize the relation between reduced brain volumes and spectral power in multiple sclerosis patients and matched healthy subjects. During resting-state eyes closed, we collected magnetoencephalographic data in 67 multiple sclerosis patients and 47 healthy subjects, matched for age and gender. Additionally, we quantified different brain volumes through magnetic resonance imaging (MRI). First, a principal component analysis of MRI-derived brain volumes demonstrates that atrophy can be largely described by two components: one overall degenerative component that correlates strongly with different cognitive tests, and one component that mainly captures degeneration of the cortical grey matter that strongly correlates with age. A multimodal correlation analysis indicates that increased brain atrophy and lesion load is accompanied by increased spectral power in the lower alpha (8–10 Hz) in the temporoparietal junction (TPJ). Increased lower alpha power in the TPJ was further associated with worse results on verbal and spatial working memory tests, whereas an increased lower/upper alpha power ratio was associated with slower information processing speed. In conclusion, multiple sclerosis patients with increased brain atrophy, lesion and thalamic volumes demonstrated increased lower alpha power in the TPJ and reduced cognitive abilities.